Monthly luncheon

H.E. Sameh Fahmy, minister of petroleum, spoke on December 18 about Egypt's recent accomplishments in the oil and gas sector as well the challenges expected in the year ahead.

Speaking at the Nile Hilton's Alf Leila Ballroom, Fahmy cited recent discoveries made by oil companies - both local and foreign - in the Gulf of Suez, the Mediterranean Sea and the Western Desert. He also pointed out that there had been no change in domestic gasoline prices despite a dramatic increase in local consumption.

Noting the growing participation of multinational oil companies in the exploration and production processes, Fahmy said that foreign ownership of Egypt's fueling stations had risen from 25 percent to slightly over 50 percent over the last couple of years.

Private sector participation in the sector, including local oil companies as well as multinationals, has grown at a similar rate, jumping from 20 percent to 80 percent over the same period.
For many years, Fahmy said, Egypt was an exporter of low-quality petrochemical products. The country is now producing higher-quality products such as jet fuel and propane, which are currently exported to South America, Africa and Asia.

As for future challenges, Egypt needs to develop its vast potential for liquefied natural gas (LNG) production, Fahmy said. He said Egypt was ready to begin exporting LNG.

Proven reserves of natural gas have grown consistently with new discoveries. "We have more than enough gas to export," he declared, adding that a planned LNG pipeline to connect Egypt, Jordan, Syria and Lebanon is underway.

The minister stressed the need for more private investment in the sector in order to tap Egypt's potential. "There's room for everybody," he urged, imploring the Egyptian private sector in particular to enter the industry. "The time has come for private sector companies to have the courage to come explore."

After the minister's speech, executives from three foreign petroleum companies, all of which have operations in Egypt based on joint ventures with the government, spoke about recent discoveries.

Rodney Eichler, vice president and general manager in Egypt for Texas-based Apache, said his company's Egyptian concessions now account for 20 percent of its revenue, although Apache only opened its Cairo offices as recently as 1996.

BP Egypt president and general manager Hisham Mekawi spoke about the success of BP's Edfu concession, which went from the exploration phase to the production phase in less than a year.
Finally, Ocean East general manager Rick Bott, Jr. told how his company, despite being a relative newcomer to Egypt, manages to produce oil at a rate of 27,000 barrels a day.

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